MUMBAI: With the decline in venture capital funding, Indian family offices are stepping up as significant investors in startups. For instance, the Sattva Group, led by Adrija and Shivam Agarwal, has diversified its investments into the tech sector, focusing on startups like InCred and Smytten with over US$100 million invested.
Recent data indicates family office investments nearly doubled to US$1.62 billion in 2024, despite an overall decline in venture capital to US$6.71 billion. Analysts suggest that family offices provide a more stable capital source amid volatile global investments.
Prominent family offices, such as Catamaran Ventures and Premji Invest, reflect a growing trend in utilizing wealth for innovative sectors. Structured family offices in India have surged from 45 to 300 in six years, indicating a notable shift towards tech investment.
Family offices are seen as patient capital investors, willing to engage longer with startups compared to traditional VCs. This flexibility is beneficial given the cautious nature of venture capital firms lately.
While family offices offer a critical support system for startups, challenges remain with generational alignment and governance. However, they are viewed as complementary to VCs, with founders strategically seeking a diverse mix of investors, including family offices for their unique advantages in industry knowledge and mentorship.